Overseeing Projects & Programs at UBS

Month: December 2014

Money isn’t everything. I’m not even sure it’s all that much. My view is that money is a tool for meeting one’s needs and one’s desires, but there are so many things that money doesn’t do that I think it’s worth bearing in mind that it won’t solve all your problems. Money doesn’t make you younger, or smarter, or kinder, or healthier. It won’t help with that bald spot and it won’t help you write that novel you’ve been working on since the (first?) Clinton administration.

Money is important in all our lives, but they are not kidding when they say it ain’t everything.

Was getting my haircut today (one of my favorite activities, by the way: just sitting in that chair helps me pretend that “too much hair” is a problem in my life). I had never been attended by the barber cutting my hair, who was a youngish guy (30ish) with a stocky build, sporting a full beard and tattoos.

He was pleasant enough, but the chit chat was having some trouble. I mentioned I worked at UBS, which was just two doors away (with a big sign on top saying “UBS Tower”), and he said he’d never heard of it. Sports talk didn’t go anywhere. He asked me how my day was and I said “can’t be too bad; the Cubs didn’t lose today.” He said “oh is that right? Great.” Mind you, this was December, well into the off-season.

He took over topic selection at that point, and he chose bikes. Motorcycles, specifically, which I know nothing at all about. Not a thing. He told me he’d just purchased a new one, and was all excited to fill me in on the design and technical specs which flew about four miles over my head. He threw in that he was cutting hair to get the bike paid off. Alas! Personal finance! Something I could discuss.

He discussed how he struggled to get the financing, and had to keep shopping around until he found a lender. “Yeah I knew with my credit I might have some trouble getting approved.” He got approved alright: he found a lender willing to loan him what he needed at the astounding rate of… 28%. I honestly didn’t know that was legal. And for the first time in a long time, I was mute on the topic of personal finance.

With regards to the second point, parents and students can easily fall victim to the prestige game: the Ivies, MIT, Stanford, Chicago, Amherst, Williams, Swarthmore, etc. With costs running up and over $60,000 per year, it is fair to ask whether is meant to run a quarter of a million dollars.

My view: it’s not worth it. A fine education is available at excellent state universities and even community colleges, both of which have been beefing up their honors offerings for their brightest students. I look around UBS and plenty of successful directors are from less obvious academic institutions. I’m glad I went to Stanford and Penn. They were wonderful places to go to school, but attendance and graduation from a big name Ivy guarantees nothing; nor does attending a lesser prestige school preclude anything.

I’ve got occasional inquiries from friends on personal debt strategies: how to pay them down? how to prioritize? Are there any tricks you’ve learned at UBS or Stanford?

To the last question, no. There are no special tricks. Take the highest interest debt and work on winnowing that down, while maintaining minimum payments on all other debts. When that highest interest debt is paid off, move on down to the next highest interest debt, and tackle that one.

No tricks, but a whole lot of personal discipline and commitment to becoming debt free.

Great article here on the practical side of being poor: it is difficult to save. Period. And that difficulty results in a rapid snowballing effect when life intervenes. In this case, a towed truck becomes a lost job becomes homelessness. A good reminder to financial advisers of the dangers of sounding too preachy when exhorting families to save and invest. For some families, this is an enormous hurdle. Worth the brainpower of top bankers to see if they can tackle this one. What great PR for Wall Street if they could actually address Main Street problems.

A good way to start off the New Year on the wrong financial foot is to end the prior one handing out lavish Christmas and Holiday gifts. Pare down your lists, keep the gifts you do give simple and practical, and think of how many people you’ve shunned from your life because you didn’t like their gifts (answer: none).